{3 minutes to read}  Are you a shareholder, director, or officer of a corporation, just realizing or maybe having realized a while back that your corporate governing documents are out of date? If so, that could be problematic, but it's not fatal.

First, a quick background — When a corporation is formed, there are certain formalities that have to be complied with in order for that corporation to validly operate on an ongoing basis. The first, of course, is that there are Articles of Incorporation, or Certificate of Incorporation — it's called different things, but has to be something filed with the state to form the entity within the state. In addition, there are documents that have to be prepared that aren't necessarily filed with the state, but that are internal to the corporation, and those are the board minutes of the organizational meeting at which the board of directors will adopt bylaws and authorize the issuance of stock and then also elect officers. After that, the stock actually has to be issued, so typically, a stock ledger is prepared.  All of those things must be done before the company is validly operating.

In addition, each year, the shareholders and the Board are required to have an annual meeting. The main things done at the annual meetings are the shareholders will elect the Board members and then the Board will elect officers. If those things aren't done and problems with the company arise, either with a third party or maybe even a dispute among the shareholders, it could be unclear who actually has the authority to act on behalf of the company. In drastic situations, this could cause the loss of limited liability for the shareholders of the company. 

We've assisted many companies with bringing their documents current. If you're in this situation, what we would do for you is

•Review the existing documents.

•Recommend those things that must be done.

Typically, that would be drafting shareholder or board resolutions to ratify prior acts. It may involve amending the articles of incorporation with the state. It could involve amending the bylaws of the company and/or changing information that is recorded with the state in which the company is incorporated. 

If you are in this situation, please give us a call.